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Disclosure announcement transmitted by euro adhoc.
The issuer is responsible for the content of this announcement.
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Sales proceeds total TEUR 1.757 within Q3 2005 (comparison period
2004: TEUR 5.111). As in the first 6 months 2005 these are mainly
generated from the sales of titles already published in 2004 (back
catalogue). In this Industry the months of July and August show
traditionally small turnover. Thus sales of Q3 are mostly generated
in September.

Titles of the planned line-up 2005/2006, for which new distribution
agreements were closed within the past months and which will be
released during Q4 2005 respectively during the first quarters of
2006, are therefore not included in the results of cumulated Q3 2005.

Compared to the comparison period the reduced turnover is mainly the
result of the fact that a total of 8 titles was published and sold
within Q3 2004.

The gross profit after depreciation of the game titles is TEUR 985
(comparison period 2004: TEUR 2.510). The gross margin of 56 % is
higher than in the comparison period of 2004 (49 %).

Within the sales and management costs the realised reduction of the
cost structure during Q3 2005 is now apparent for the first time. The
total of the cost reductions will be fully effective in Q4 2005. The
further reduction of sales and management costs within Q3 2005 (TEUR
1.147) compared to the comparison period of 2004 (TEUR 2.307) is
principally generated by the cost reductions within personnel in the
course of the final consolidation of the German subsidiaries Neon and
Massive. As of September 30, 2005, the cumulated sales and
management costs thus could be reduced from TEUR 5.987 to TEUR 4.758,
compared to the expenses of the comparison period of 2004.

The sales results of back catalogue titles during Q3 2005 as well as
the strict reduction of sales, management and other costs show a
positive EBIT before restructuring of TEUR 85 (comparison period
2004: TEUR 184). The EBIT expressed in percentage of the turnover
could be increased to 5 % (comparison period 2004: 4 %).

Within restructuring and extraordinary expenses of total TEUR 16.594,
the positions that are not directly connected to the operative
business of 2005 are listed. These are expenses which became
necessary due to the renewed restructuring of the company as well as
expenses which concern events of 2004 but became evident only during
2005.

For the sake of caution and due to the latest developments the game
title "Stargate SG-1TM: The Alliance" was completely depreciated. In
order to avoid further loss of cash to subsidiaries, the German
development studios Massive and Neon were finally consolidated. The
closing of the German Studio Wings is in progress and will be
completed in Q4 2005. In Q3 a total of TEUR 5.606 had therefore to be
considered, TEUR 5.536 of which to the depreciation of the game
"Stargate SG-1TM: The Alliance".

The main positions comprise value adjustments of accounts receivable
(TEUR 210), closing respectively final consolidation of studios and
the connected stop of game developments (TEUR 2.340), discontinuation
of game developments due to unprofitability (TEUR 921), loss-free
evaluation without "Stargate SG-1TM: The Alliance" (TEUR 4.489),
value adjustment game title "Stargate SG-1TM: The Alliance" (TEUR
6.196), price credits for deliveries out of 2004 due to lack of
usability in the retail market (TEUR 2.308) and other restructuring
expenses (TEUR 130).

For the sake of caution a further depreciation of deferred taxes was
effected in Q3 2005. Because of the positive results of the going
concern prognosis the tax savings of the coming years were calculated
and the difference was depreciated (TEUR 2.440). These expenses are
not cash relevant.

Asset situation

The reduction of the semi-finished and finished goods compared to the
year end 2004 by TEUR 11.365 as well as compared to the comparison
period by TEUR 19.872 to TEUR 5.503 is caused by the depreciation
method now applied, necessary discontinuation of the unprofitable
product developments, the consideration of loss- free evaluations,
the value adjustment of the game title "Stargate SG-1TM: The
Alliance" and the increased balancing of advances. The reduction in
the position goods concerns mainly titles of the back catalogue.

The considerable reduction in the receivables from supplies and
services totalling approximately TEUR 8.750 compared to the year end
2004 is due both to an above-average deadline-related receivables
situation at the year end 2004 as well as to the set-off against
reserves and liabilities. Considerable price credits for games
deliveries in 2004 also had to be issued.

The high losses result in a negative equity of TEUR 7.212 as of
September 30, 2005. Negotiations with creditors concerning the
correction of the balance sheet structure and improvement of the
liquidity situation are ongoing. Furthermore JoWooD negotiates with
investors who shall participate in the company and strengthen the
equity basis. These negotiations are under the assumption that no
mandatory offer according to the Austrian take-over law will be
caused by the participation of an investor. The management acts on
the assumption of a positive going concern prognosis.

The increase in the liabilities from supplies and services compared
to the year end 2004 is the result of a conversion of accruals into
liabilities and the disclosure of incoming debtors as liabilities.

Financial situation

The cumulated operative cash flow as of September 30, 2005 (TEUR
-544) remained almost unchanged compared to the first half year 2005.
(TEUR -523). The operative cash flow of Q3 2005 is therefore almost
balanced. So the positive development compared to the comparison
period of last year is ongoing. The cumulative operative cash flow
in the comparison period 2004 was TEUR -17.284. During the
nine-month-period ended September 30, 2005 the company thus managed
to almost completely finance its activities without third party
funds, although the overall conditions (reduced turnover, high
restructuring expenses) were very unfavourable.

The payments of investments of TEUR 119 are within usual bounds and
due to the closing of studios significantly lower than in the
comparison period of 2004 (TEUR 473).

The financing cash flow of TEUR 411 comprises repayments of long-term
financial liabilities and the taking of short-term cash.